Key facts
- IDA-eligible countries paid an average 8.2% on new private-creditor commitments, the highest since 1989, the World Bank said.
- The same group paid 9.4% on new bonds, while countries not eligible for IDA loans paid 5.5%, down from 5.8% in 2024.
- Payments to private creditors rose 13.7% to $363 billion in 2025, the World Bank said.
- Developing countries paid $436 billion more in debt service than they received in new financing from 2022 to 2025, with a $45 billion net inflow in 2025.
- The weaker dollar accounted for over 28% of the increase in developing countries' debt, the World Bank said.
- Haishan Fu, the World Bank's chief statistician, said countries are borrowing more and paying more, leaving less for long-term development.
Low- and middle-income countries' external debt rose 5.5% to a record $9.4 trillion in 2025, the largest annual increase since 2021, the World Bank said in its annual International Debt Report published on November 5, 2026. The bank said the rise threatened to crowd out investment in education, infrastructure, health and jobs.
The World Bank said borrowing through international bond markets continued in 2026, raising questions about "whether the terms are sustainable and whether the capital raised is reaching the people and places that need it most." It said access to international finance had improved, but the poorest developing countries paid an average 8.2% on new private-creditor commitments, the highest rate since 1989, and 9.4% on new bonds.
Countries not eligible for low- and zero-interest loans under the International Development Association paid an average 5.5% on new bonds, down from 5.8% in 2024, the bank said. Borrowing from private creditors and bond issuance by public entities rose nearly 35% to $251 billion, the highest in five years, and external debt grew fastest among IDA-eligible countries, rising 8.1% to $1.3 trillion.
"The return of private lending to low- and middle-income countries is welcome, but these countries are borrowing more, paying more, and in many cases leaving less for long-term development," said Haishan Fu, the World Bank's chief statistician.
The report said many governments issued new bonds to buy back maturing debt, extending repayment profiles often at higher interest rates without significantly reducing debt stocks. By mid-August 2026, more than 10 countries had exceeded their full-year 2025 issuance, while several others returned to international markets, it said.
Low- and middle-income countries paid $1.4 trillion in principal and interest in 2025, the fifth consecutive annual increase, driven by a 13.7% rise in payments to private creditors to $363 billion. From 2022 to 2025 they paid $436 billion more in debt service than they received in new financing, though the report cited a net inflow of $45 billion in 2025.
The World Bank said the dollar's depreciation raised the dollar value of debt denominated in other currencies and accounted for over 28% of the increase in developing countries' debt. It warned that higher debt service costs could mean weaker investment and greater vulnerability to shocks, and pushed for more transparency on debt arrangements and for closing data gaps.